Howmet Rises 26.5% Year to Date: Should Investors Buy the Stock Now?

Howmet Aerospace Inc.’s HWM shares have surged 26.5% in the year-to-date period, outpacing the S&P 500’s gain of 12.2% and the industry’s 5.4% decline. The advanced engineered solutions provider for the aerospace and transportation industries has also outshone its peers like GE Aerospace GE and RTX Corporation RTX, which have returned 9.4% and 9.5%, respectively, over the same time frame.

HWM Outperforms the Industry, S&P 500 & Peers

Image Source: Zacks Investment Research

Closing at $259.27 on Sept. 4, the stock is trading below its 52-week high of $310.00 but significantly higher than its 52-week low of $176.32. The stock is trading below its 50-day moving average but way above its 200-day moving average.

Howmet Shares’ 50-Day and 200-Day SMA

Image Source: Zacks Investment Research

What’s Behind HWM Stock’s Momentum?

The strongest driver of Howmet’s business at the moment is the commercial aerospace market. The company is benefiting from solid demand for both narrow and wide-body aircraft, which is supporting higher OEM spending. Pickup in air travel has been positive for the company, as the increased usage of aircraft spurs spending on parts and products that it provides.

Revenues from the commercial aerospace market increased 28% year over year in the second quarter of 2026, following an increase of 20% in the first quarter. The market constituted 53% of its overall business, supported by robust spares demand for engines. Healthy build rates at Airbus for A320 and A350 aircraft, along with a production recovery in the Boeing 737 MAX aircraft, hold promise for HWM’s spare engine demand.

Howmet is also benefiting from persistent strength in the defense aerospace business, cushioned by steady government support. HWM has been experiencing robust orders for engine spares for the F-35 program and other legacy fighters. Revenues from the defense aerospace market increased 11% year over year in the second quarter, constituting 15% of the company’s business.

It's worth noting that the fiscal year 2026 Defense Appropriations Act was signed into law in February 2026, providing a strong budgetary allocation for defense. Such robust provisions set the stage for Howmet, which remains focused on its defense business.

Driven by its business strength, Howmet raised its 2026 revenue outlook to $10.00-$10.10 billion. Adjusted EBITDA is anticipated between $3.21 billion and $3.25 billion, with adjusted earnings projected at $5.23-$5.31 per share.

HWM remains committed to strengthening its business through acquisitions. In April 2026, the company acquired Stanley Black & Decker, Inc.'s SWK Consolidated Aerospace Manufacturing LLC (“CAM”) business for $1.8 billion. The buyout strengthened HWM’s aerospace fastening solutions portfolio through its established brands, engineering capabilities and deep customer relationships.

Howmet’s measures to reward shareholders are also encouraging. During the first half of the year, HWM distributed $97 million in dividends. In July 2026, it raised its quarterly dividend by 17% to 14 cents per share, equivalent to 56 cents annually. Additionally, through July, the company had repurchased $800 million worth of shares year to date.

Earnings Estimate Revision

Image Source: Zacks Investment Research

Earnings estimates for HWM have moved north over the past 60 days, reflecting analysts’ optimism.

The Zacks Consensus Estimate for 2026 earnings is pegged at $5.26 per share, suggesting year-over-year growth of 5.8%. The consensus mark for 2027 earnings is pinned at $6.22 per share, indicating a year-over-year increase of 5.1%. As earnings estimates increase, the stock is likely to follow suit.

Near-Term Concerns

However, Howmet’s shares declined recently after CEO Elon Musk announced that SpaceX intends to begin producing natural gas turbine blades at its Texas facility. This development is likely to bring a new competitive dynamic in the highly specialized turbine blade market, where Howmet has established a strong foothold. Nevertheless, HWM is poised to maintain strong demand momentum moving ahead with growing demand for industrial gas-turbine blades globally.

Stock Valuation

Image Source: Zacks Investment Research

The stock trades at a forward 12-month price-to-earnings (P/E) ratio of 43.79X, higher than the industry average of 30.74X. Also, it is overvalued compared with its peers, GE Aerospace and RTX Corp. Notably, GE Aerospace and RTX Corp. are trading at 39.02X and 26.44X, respectively. This elevated valuation could make the stock vulnerable to further pullbacks if market sentiment sours.

Should You Invest in HWM Stock Now?

Persistent strength across both the commercial and defense aerospace markets, supported by strong build rates, spare demand for engines and a high defense budget, positions Howmet favorably for impressive growth in the quarters ahead. Built on a sound liquidity position, HWM’s shareholder-friendly policies also add to its appeal.

Despite its expensive valuation and likely competition from SpaceX in the turbine market, positive analyst sentiment, robust growth prospects and higher annual guidance for revenues and earnings indicate it is the appropriate time for potential investors to bet on this Zacks Rank #2 (Buy) company. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Zacks' Research Chief Names "Stock Most Likely to Double"

Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.

This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research